Climate risk and corporate investment behavior in emerging economies

IF 4.6 2区经济学 Q1 BUSINESS, FINANCE

Emerging Markets Review Pub Date : 2025-01-27 DOI:10.1016/j.ememar.2025.101257

Adam Arian , Muhammad A. Naeem

{"title":"Climate risk and corporate investment behavior in emerging economies","authors":"Adam Arian , Muhammad A. Naeem","doi":"10.1016/j.ememar.2025.101257","DOIUrl":null,"url":null,"abstract":"<div><div>Our study examines the impact of climate risk on the investment outcomes of publicly traded firms in emerging economies, an important yet understudied issue amid the rising occurrence of severe climate events. Despite the emphasis on the macroeconomic impacts of climate events in existing literature, there is limited insight into the impacts on firm-level investment decisions and outcomes, particularly in regions with higher vulnerability to climate change. We assess climate risk and corporate investment efficiency through the Global Climate Risk Index (CRI), utilizing a dataset comprising 308,620 firm-year observations across 52 countries between 2007–2019. The findings of our study show that firms in higher climate risk regions experience lower investment efficiency due to adopting more conservative investment strategies to mitigate operational and financial uncertainties. Additional analysis of the industries that require stable environmental conditions for operation or depend heavily on fixed assets highlights the significance of integrating climate risks into financial and investment policies that can improve corporate resilience and long-term growth.</div></div>","PeriodicalId":47886,"journal":{"name":"Emerging Markets Review","volume":"65 ","pages":"Article 101257"},"PeriodicalIF":4.6000,"publicationDate":"2025-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Emerging Markets Review","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1566014125000068","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 0

Abstract

Our study examines the impact of climate risk on the investment outcomes of publicly traded firms in emerging economies, an important yet understudied issue amid the rising occurrence of severe climate events. Despite the emphasis on the macroeconomic impacts of climate events in existing literature, there is limited insight into the impacts on firm-level investment decisions and outcomes, particularly in regions with higher vulnerability to climate change. We assess climate risk and corporate investment efficiency through the Global Climate Risk Index (CRI), utilizing a dataset comprising 308,620 firm-year observations across 52 countries between 2007–2019. The findings of our study show that firms in higher climate risk regions experience lower investment efficiency due to adopting more conservative investment strategies to mitigate operational and financial uncertainties. Additional analysis of the industries that require stable environmental conditions for operation or depend heavily on fixed assets highlights the significance of integrating climate risks into financial and investment policies that can improve corporate resilience and long-term growth.

查看原文本刊更多论文

新兴经济体的气候风险与企业投资行为

我们的研究考察了气候风险对新兴经济体上市公司投资结果的影响，在严重气候事件不断发生的背景下，这是一个重要但尚未得到充分研究的问题。尽管现有文献强调气候事件的宏观经济影响，但对企业层面投资决策和结果的影响的见解有限，特别是在易受气候变化影响的地区。我们通过全球气候风险指数（CRI）评估气候风险和企业投资效率，利用的数据集包括2007-2019年52个国家的308,620个公司年度观测数据。研究结果表明，气候风险较高地区的企业采用更为保守的投资策略来降低运营和财务的不确定性，因此投资效率较低。对需要稳定环境条件进行运营或严重依赖固定资产的行业的进一步分析强调了将气候风险纳入金融和投资政策的重要性，这可以提高企业的抵御能力和长期增长。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

Emerging Markets Review Multiple-

CiteScore

7.10

自引率

4.20%

发文量

审稿时长

100 days

期刊介绍： The intent of the editors is to consolidate Emerging Markets Review as the premier vehicle for publishing high impact empirical and theoretical studies in emerging markets finance. Preference will be given to comparative studies that take global and regional perspectives, detailed single country studies that address critical policy issues and have significant global and regional implications, and papers that address the interactions of national and international financial architecture. We especially welcome papers that take institutional as well as financial perspectives.